CBRT Data: Real Effective Exchange Rate Declines to 105.04 in August

The Central Bank of the Republic of Türkiye (CBRT) has released its real effective exchange rate data for August 2026, showing a decline in the index based on consumer prices.

According to the latest figures, the CPI-based real effective exchange rate index fell by 1.07 points in August to 105.04, down from 106.11 in July.

The index calculated using the Domestic Producer Price Index (D-PPI) also decreased during the month. The D-PPI-based real effective exchange rate index declined by 0.26 points to 101.35.

Movements in foreign exchange rates and domestic prices were among the key factors affecting the index in August. The average value of the US dollar against the Turkish lira increased by 1.68% compared with the previous month, while the average euro exchange rate rose by 3.20%.

Meanwhile, consumer prices in Türkiye increased by 1.84% in August, while domestic producer prices climbed by 2.57% on a monthly basis.

The CBRT noted that the increase in Türkiye’s consumer prices contributed positively to the CPI-based real effective exchange rate index. In contrast, changes in the global consumer price basket and the nominal exchange rate basket had a downward effect on the index.

The real effective exchange rate is closely monitored as an indicator of the Turkish lira’s value against the currencies of Türkiye’s major trading partners after taking relative price developments between countries into account.

The August figures highlight the combined impact of domestic inflation and exchange-rate movements on the real value of the Turkish lira.

Editor’s Note:
The August figures point to a limited but noteworthy decline in the Turkish lira’s real value. However, the drop in the CPI-based index to 105.04 should not be interpreted simply as “the lira lost value,” since the real effective exchange rate reflects not only nominal exchange-rate movements but also price developments between Türkiye and its major trading partners. While the US dollar and particularly the euro gained against the lira, the 1.84% increase in domestic consumer prices exerted a different kind of pressure on the index. The key issue, therefore, is not merely the level of the index but the continuing influence of Türkiye’s high inflation on the lira’s real value indicators. A lasting improvement will require focusing not only on exchange-rate movements but also on bringing inflation down in a sustainable manner.